Earlier this week, in an Easter statement, the Real IRA claimed responsibility for the murder, which is still under Garda investigation.

A garda spokesperson said yesterday that “for operational reasons” gardai were not in a position to comment on or discuss the latest revelations.

It has since been claimed by Republican sources that the man is now under protective garda custody after leading investigators to the hiding place of the sledgehammer used by the killers to break down Donaldson’s cottage door.

Gardai may now be able to recover forensic evidence from the sledgehammer but it could take some time and may involve experts from Britain.

According to reports in Derry and Donegal, the man, who is in his 20s and is from Derry, had survived a number of |attempts on his life.

In one attack, gunmen opened fire while he was sitting in his car but he managed to survive the hail of bullets and fled the scene, while a pipe bomb was left at his home a month earlier.

The Real IRA claimed responsibility for the attack.

However at an adjourned inquest into the death of Mr Donaldson last February, Glenties based Supt. Eugene McGovern sought an adjournment of a year because of “another avenue of investigation” which had emerged.

He told the inquest that the assistant commissioner had informed the Donaldson family about the new line of inquiry which, he indicated, would take gardai some time to pursue.

Donaldson, who had been operating secretly as a British spy for 20 years, was found dead in his remote home at Cloghercor near Doochary on April 4, 2006.

He had been shot four times in the chest, face, arm and hand in the tiny cottage where he had been living alone, having fled his home in west Belfast.

At the 32 County Sovereignty Movement Easter Rising commemoration in Derry City cemetery on Monday, the Real IRA claimed it had carried out the killing, adding the chilling warning that “no traitor will escape justice regardless of time, rank or past actions.”